China-based Luye Pharma Group (HKG: 2186) has released its 2022 interim report, recording RMB 2.85 billion ($395 million) in revenue during the first half of this year, down 3.4% year-on-year (YOY). Net profits fell 23% YOY to RMB 297 million ($41.1 million). The results reflect ongoing market challenges and policy impacts on the company’s performance.
Product Revenues
Luye Pharma’s major products, including paclitaxel liposomes, glycididazole, bevacizumab, Xue Zhi Kang, aescin, acarbose, rivastigmine, quetiapine, and risperidone, continue to hold strong market positions globally. However, revenue performance varied across therapeutic areas:
- Cardiovascular system products generated RMB 787.1 million ($109 million), down 1.7% YOY.
- Digestive and metabolic products brought in RMB 322.74 million ($44.7 million), down 29.6% YOY.
- Oncology products saw an increase of 10.6% YOY, generating RMB 1.025 billion ($142.1 million).
- Nervous system products generated RMB 651.7 million ($90.3 million), down 6.1% YOY.
R&D Progress
Despite the revenue decline, Luye Pharma has made significant progress in R&D. As of June 30, 2022, the group had 32 products under development in China, including 13 oncology products, 12 central nervous system (CNS) products, and 7 other products. Additionally, 13 products are being developed in the US, Europe, and Japan.
Key R&D milestones include:
- Market filing for oxycodone and naloxone accepted for review by the National Medical Products Administration (NMPA) in January 2022.
- LY01017, a PharmaMar-licensed product for small cell lung cancer (SCLC), was used as a clinically urgent drug in Boao Lecheng in July 2022.
- In-house developed Category 1 drug LY03005 for generalized anxiety disorder saw its market filing accepted for review by the NMPA in June 2022.
- Rivastigmine transdermal patch (twice per week) awaits regulatory decision in China after being approved in multiple European locations in 2021.
- Category 1 painkiller LPM3480392 concluded Phase I clinical study in May 2022.
- Phase III studies for rotigotine extended-release microspheres (LY03003) in Parkinson’s disease (PD) and goserelin acetate sustained-release injectable microspheres (LY01005) in breast cancer reached pre-set endpoints in July 2022.
- Dulaglutide is undergoing Phase III clinical trials in China.
R&D expenses increased by 31.5% to RMB 379.3 million ($52.6 million).
Industrial Policy Risks
The National Reimbursement Drug List (NRDL) and volume-based procurement (VBP) have significantly impacted Luye Pharma’s pricing and market access. Paclitaxel liposomes entered the NRDL in 2020 with a 67% price cut. Acarbose participated in the second VBP round, resulting in a 60% price cut. Quetiapine did not win a place in the third and fourth VBP rounds. No products were shortlisted in the fifth to seventh VBP rounds.-Fineline Info & Tech
